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Do national political parties matter? Evidence from Italian municipalities

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  • Gamalerio, Matteo

Abstract

Recently several countries have experienced a drop in popularity of national political parties, accompanied by the success of independent movements (e.g. “Civic Lists” in Italy). I exploit the success of “Civic Lists” in Italian municipalities and use them as a comparison group for party-affiliated politicians, to test whether national parties affect fiscal discipline. Using a Regression Discontinuity Design (RDD), I show that party-affiliated mayors are more fiscally responsible: they run lower deficits, accumulate less debt and reduce expenditures. The effect is significant only for municipalities not constrained by fiscal rules. This suggests that national parties act as a substitute for fiscal rules in constraining politicians. Besides, I provide evidence that the discipline of party-affiliated politicians is linked to better career prospects: party-affiliated mayors have a higher probability of being re-elected and better chances of being promoted to higher levels of government. Alternative stories find less support in the data.

Suggested Citation

  • Gamalerio, Matteo, 2020. "Do national political parties matter? Evidence from Italian municipalities," European Journal of Political Economy, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:poleco:v:63:y:2020:i:c:s0176268020300100
    DOI: 10.1016/j.ejpoleco.2020.101862
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    2. Federico Boffa & Vincenzo Mollisi & Giacomo A. M. Ponzetto, 2023. "Do incompetent politicians breed populist voters? Evidence from Italian municipalities," Economics Working Papers 1861, Department of Economics and Business, Universitat Pompeu Fabra.
    3. Bordignon, Massimo & Gamalerio, Matteo & Turati, Gilberto, 2020. "Manager or professional politician? Local fiscal autonomy and the skills of elected officials," Regional Science and Urban Economics, Elsevier, vol. 83(C).
    4. Cerqua, Augusto & Zampollo, Federico, 2023. "Deeds or words? The local influence of anti-immigrant parties on foreigners’ flows," European Journal of Political Economy, Elsevier, vol. 77(C).
    5. Bordignon, Massimo & Franzoni, Federico & Gamalerio, Matteo, 2024. "Is Populism reversible? Evidence from Italian local elections during the pandemic," European Journal of Political Economy, Elsevier, vol. 81(C).
    6. Ferraresi, Massimiliano & Gucciardi, Gianluca, 2022. "Political alignment, centralisation, and the sense of government unpreparedness during the COVID-19 pandemic," European Journal of Political Economy, Elsevier, vol. 73(C).
    7. Kshitiz Shrestha & Jorge Martinez‐Vazquez & Charles Hankla, 2023. "Political decentralization and corruption: Exploring the conditional role of parties," Economics and Politics, Wiley Blackwell, vol. 35(1), pages 411-439, March.
    8. Gabriel Natividad, 2022. "Decentralizing investment: Evidence from municipal organization after close elections," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 31(3), pages 734-761, August.
    9. Makarin, Alexey & Piqué, Ricardo & Aragón, Fernando, 2020. "National or sub-national parties: Does party geographic scope matter?," Journal of Development Economics, Elsevier, vol. 146(C).
    10. Kuliomina, Jekaterina, 2021. "Do personal characteristics of councilors affect municipal budget allocation?," European Journal of Political Economy, Elsevier, vol. 70(C).
    11. Massimo Bordignon & Federico Franzoni & Matteo Gamalerio, 2023. "Is Populism reversible? Evidence from Italian local elections during the pandemic," DISCE - Working Papers del Dipartimento di Economia e Finanza def124, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    12. Momi Dahan & Itamar Yakir, 2022. "Revealed political favoritism: evidence from the allocation of state lottery grants in Israel," Public Choice, Springer, vol. 190(3), pages 387-406, March.
    13. Matteo Gamalerio & Margherita Negri, 2023. "Not welcome anymore: the effect of electoral incentives on the reception of refugees," Review of Finance, European Finance Association, vol. 23(4), pages 901-920.
    14. Boffa Federico & Mollisi Vincenzo & Ponzetto A. M. Giacomo, 2024. "Do Incompetent Politicians Breed Populist Voters? Evidence from Italian Municipalities," Working papers 087, Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    15. Matteo Gamalerio & Margherita Negri, 2023. "Not welcome anymore: the effect of electoral incentives on the reception of refugees," Journal of Economic Geography, Oxford University Press, vol. 23(4), pages 901-920.

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    More about this item

    Keywords

    Party affiliation; Independent politicians; Fiscal discipline; Fiscal rules; Local government finance; RDD;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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